more stocks vs. investing in vacation/rental properties

[leastprime]

Re:Vacation home
JMO, my mom and dad bought a place on the Oregon coast, 1970, just 60miles from where we lived. Easily within a daily commute. Nice little town, tourist based, quaint like in a "summer of 42." Lots to do there, Ocean, river, lake fishing, clamming, walks on the beach or hikes in the woods. Casinos 25-35 miles. When the weather is good-It's stupendous. When it storms- it's frightening.
I have seen numerous RE market crashes there. The big one of 2006-2012 was huge. Notebooks full; Majority of homes for sale; It started earlier and ended later than metropolitan areas. You could name your bid price on BO property. Today, it's the opposite. I guarantee you that homes at the Beach will crash again.
Ultimately the beach home is just a legacy to the next generation. It was Mom's legacy to us. Siblings renounce our claims in favor of our younger sister . It will probably be her legacy to her children.

On the stock investing-store of wealth, my trading accounts value, are now equal to Jan 2021 valuations.
We held property in our working years. We hold rental property in our retirement years. Both are different stories.

[mandh]

Thanks everyone. I truly appreciate all the response. All of your responses makes sense and we have also been worried about buying right now - and based on all suggestions here this is a bad idea. Vacation home may not be a good thing to chase right now (especially in Texas). We started looking a few years ago when prices were still cheaper, but did not get around to it. With the pandemic, our desire to have a place to escape (to nature/beach) strengthened. But now the market is crazy. We may just have to do more weekend trips and stay at airbnbs or look for cheaper vacation places outside of Texas. Thanks for all the stories you shared. What are some nice places with cooler weather (mountains/water/forest) and lower property taxes where one can get a vacation home (we may buy something relatively cheaper, pay cash and just keep it for summer breaks)?

You are all right that stocks take less time, but we don't seem to have enough time to track these. I should be trying to put some alerts to know when stocks start big fall. Big blunder yesterday selling Netflix stocks as they were falling. We made pretty good gains from it.. But had no reason to rush and sell yesterday.
Although I had been wanting to get out of Netflix for a while, I might have picked the worst day to get out!
Looking for another good stock to put that back in.

Since this is a forum where I enjoyed reading many of your stock investment details: My longest holding is Amazon (really want to exit at some point but not sure what else can match that). Most recent one is Uber (not sure if this is a good one yet- guessing it will go up once the pandemic is over).

[leastprime]

~60% of our retirement income is in SS, Pension, and GLWB Annuities. ~40% is rental income. Trading accounts are not counted as they are too variable, excess of our needs, and for emergency use or big tickets.
We did extensive planning in 2008 and made different scenarios for 10 year projections.
YMMV

[HB2HSV]

Originally Posted by mandh

Thanks everyone. I truly appreciate all the response. All of your responses makes sense and we have also been worried about buying right now - and based on all suggestions here this is a bad idea.

It sounds like you've reached an interim solution for now. But here are some ideas as food for thought for you.

I own rental properties in addition to my primary residence. But I would NEVER buy a vacation home and, either paying all cash or pay the monthly mortgage payments. What I'd suggest is for you to examine your motivation in buying a vacation home? Is it for future capital appreciation, or for your "pleasures". If the latter, how many days in a year will you be occupying the vacation home? Would it make a better financial sense to rent AirBnB when you want to take a vacation instead?

From your OP, it sounds like you expect a long term appreciation in the housing market. If so, then why not acquire the property with 20% down payment then have a RENTER paying for your mortgage instead? Hire a competent professional property management firm to manage your rental instead (typical charges 10% of rent) since both of your lives are so busy. Just make sure your property cash flow positively (rent income - expenses). In the long run, you'll enjoy the appreciation of property, the appreciation of rental income (inflation), and the tax-avoidance of your rental income.

To quote Kiyosaki: "Asset is what brings you income, Liability is what cost you money". If you buy it as vacation home, then it's a financial liability. But if you buy it as a rental, then it's an asset. In the long run, this "passive income" stream will pave the way toward your retirement.